Broker-dealers under the Advisor Group (which includes SagePoint Financial, Royal Alliance Associates Inc., Triad, Woodbury Financial Services, and FSC Securities) have increased legal reserves by about $4.4 million compared to the prior year, according to SEC filings.
GPB Sales Cost Broker-Dealers
The Advisor Group firms say they increased their reserves for “legal and regulatory matters”, but don’t say exactly what those matters are. One issue that may be costing the firms is the sale of GPB Capital Holdings private placements, which recently was charged with running a Ponzi-like scheme and had three of its senior executives arrested.
Securities disputes with registered broker-dealers are required to be resolved through FINRA arbitration, which allows investors to recover their investment losses due to their broker-dealer failing to perform due diligence, recommending unsuitable investments, overconcentrating their portfolio, and other causes.
In 2019 Silver Law Group reportedly filed the first FINRA arbitration claim in the country against a broker-dealer to recover investor losses in GPB Capital Holdings. The claim was against SagePoint Financial.
Investors were sold GPB Capital private placements as an investment that would pay them a high 8% annual return and may one day have a public offering that would provide liquidity. The investment has been a disappointment for investors. Distributions haven’t been paid since 2018, the companies offices were raided by the FBI, and in 2019 the value of the funds declined by a significant amount.
Even with GPB’s issues, investors can’t sell because of its illiquidity. They have no choice but to hold and risk losing more of their principal.
A corporate monitor has been appointed at GPB, and it is expected that the company’s assets will be liquidated and investors will receive their pro rata distribution of the proceeds. Investors will likely suffer significant losses.
Contact Silver Law Group To Recover GPB Investment Losses
Investors who want to recover their GPB losses through FINRA arbitration are encouraged to act quickly. The broker-dealers who sold GPB, including those at Advisor Group, are not behemoths like Merrill Lynch or Morgan Stanley. Some of the regional, independent firms that sold GPB operate with thin profit margins and may run out of money to pay investors and go out of business. If you have a claim, get it filed as soon as possible.
If you’re an investor in GPB Capital Holdings, contact Silver Law Group to discuss options to recover your investment losses.
Silver Law Group is a nationally-recognized law firm representing victims of investment fraud. Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice. Contact us for a no-cost consultation at firstname.lastname@example.org or toll free at (800) 975-4345.